Surveillance: China Is Overconfident, Carr Says

Without new moves that show the US is sincere, it is meaningless for its officials to come to China and have trade talks. This according to a commentary carried by state runs Shinhwa News Agency and The People's Daily otherwise known as the Communist Party mouthpiece. In the FX market, it means dollar strength and it means to Chinese currency

heading towards the seven mark. Really pleased to say. To weigh in on the efex market, Shahab Jala knows joining us now credit sweets head of FX and macro Trading Strategy. Good morning to Shahab. It's the question we always ask, is China tolerating you and weakness or is it engineering it. I think it's at the moment accepting your weakness rather

than necessarily engineering it. UM, you're seeing a widening gap between the offshore remembi um and the on shore level, the fixing on shore, which generally points to the market trying to push the currency weaker as opposed to the authorities. UM. So we're getting too important levels now. The offshore remmby at six against the dollar is a level the market expects to be protected. UM. If that's not the case and we rapidly go to seven, there could be a

backlash to that in emerging markets generally. Actually, I would say, so, let's start with the Chinese currency and the tolerance of officials. Do you think the line of the sand for officials is six on the offshore rates up. That's what the markets has felt. The market has felt that that level is important because what they wouldn't want to see is actual tests of seven, because that's too risky in a sense, UM, because once you go through that level, there's always the

possibility of a major spike. So this six level has been for the market key level and has been an expectation that, given that talks are still continuing, UM, the Chinese would not want to see a big push for the dollar above the seven level and go against their currency. Uh, simply in order to not antagonize the US. So if we now see that happen, perhaps the market will interpret

that as a green light for authorities. UM. So this is this is a potentially big problem because this wasn't the case, for example, back in Q four when problem when when we had a similar test of these levels thrilled you with us this morning, I can't say, now, folks, how wrong I was. I thought, you know, Friday, I I had the surveillance nap and looking snews of a Friday. And let me tell you, folks, to start with John News on a Friday works right now, we can talk

to him for an hour. Muhammad Hillarian rights for Bloomer Opinion, Ambrose Evans Pritchard rights for the Telegraph, and the summary of these two brilliant essays. And I remember John Llarion talking to uh Ambrose at the thing in Lake Como. Um, what they're talking about is a dollar shortage, and that China is constrained because they and everybody else out there

has a dollar shortage. Explained to our global Wall Street audience, what guys like you think or say or mean when you talk about a global dollar shortage, well, to be honest, it can mean many different things. But I think at the most critical level for the market, what it means is that there is a need to refinance dollar loans, for example, by the quote its sector in countries like China, and a sense that they may find that difficult to

do under certain circumstances. And when that's the case, that tends to put upward pressure on the dollar itself as well. Um. So that's one form of dollar shortage. But frankly, when you look at the country like China, the market also is concerned, tends to be worried about the possibility of capital flights. Um. You could argue that given the lack of global financial diversification in China, there is a permanent

dollar shortage there um. And clearly when the currency starts to fall, the odds rise that investors and others locally tried to find new ways to exactly and put further pressure on the currency. So so I think, you know, this idea of a dollar shortage is definitely in the market's consciousness and it takes many different forms. But talk about the fame of capital flight dominated the story back in extain how close are we to that? Do you still consider a situation that we are nowhere near six?

I think what's happened since then is that the Chinese authorities have ramped up the number of measures they they can use to try to keep the pressure on locally to stop money leaving China. But that's a different story though. Um if uh you get to a point where there's such a dramatic loss of confidence in China where locals fun new ways and take bigger and I think that's

something that could come through that. What's so important here away from the drama of our two or three standard deviation move is the grind of we can't sell our US security is fine, We've got to, you know, get their yielding and there's no place else to go besides

US securities. We all know that, but shop what's the outcome for their adjacent nations e m. The Pacific rim If we yet a grind in rand Mimbi weaker, well, I think it's still puts pressure on the currencies regionally, if that's what you receive, because what that would probably mean is that the Chinese government believes that it needs a week to remember longer term because of the higher odds of weaker economic growth, and that is trying its

best to control that um. But once the market perceives that that's the way the Chinese government is looking at things, it will quickly look at the other Asian emerging markets and Asia Pacific currencies and see them as a fair game. So I think either way, whether it's a slow grind lower or more dramatic collapse in the currency, there's going to be a little pressure on on the age of Pacific.

I mean, good morning, Michael Purvis, John Ferrell a d X. Why the Asian basket occurrencies extrapan is down almost three since mark. It's been really tough. And what was interesting about the session yesterday's we had a running in usquities. We did not get any pick up in emerging market equities whatsoever. Just didn't participate. This morning, China looks weak shahab from a market perspective. The equity market down two and a half percent, the Chinese currency is weaker. Is

we digest the commentary coming out of China? The government keeps saying the following it will work to counteract the effects of more US tariffs and keep the economy in a reasonable range. This is according to the National Development and Reform Commission studying the impact of US tariffs, and will roll out responsive measures when necessary. Shahab The hope is always that we get stimulus. Kitchukes of sock Gen, writing this morning, evidence of a global economic slowdown continues

to build. Bond markets have been beneficiaries. Equities are torn between the negative impact of slower growth and the feel good of accommodative central banks. What kind of accommodation do we get from Chinese authorities? I think the expectation from China is more monastoriesing, for example in the form of UM again reducing a reserve requirements on the banking system for example, something we've seen recently, but potentially even raid

cuts as well. But there's also great hopes on the fiscal side UM and we've seen, for example, measures to cut the tax burden on consumers. The problem is that there is a sense that China has already used these levers in the past it's a great effect, and that there's a big credit overhanging China already which might make constrained the government so and that this could be exactly what the US believes as well. In thinking that it can push China to make big concession. And so the

fact is we don't really know UM. No one can really tell the extent to which China's paint thresholds can sustain over the next few months. The U S appears willing to to test that UM. But the problem for the global economy and stock markets is that if both sides dig in UM, then the problems can get much worse.

Right now, there is a sense of a kind of a G twenty put you could argue in the sense there's going to be a meeting Trump, you know, in June, which which some hope will lead to a resolution a few months UM. If that was to fail to come through, I think then that's when things get much worse. Shocks. Thank you so much. Terrific briefing as well. We got eight minutes in this black which is way too short. Cruel and unusual punishment with Miranda car she's with high

tongue international. This truly could be a one hour briefing this morning. Let's try to get it going. Miranda. I'm gonna give you an open question before John goes to the dynamics over a mimby, and that You've got to get to the weekend, get to the Sunday talk shows and see where the trade talks are Monday morning. What will you focus on, Well, it depends what the US note does in um, whether it tries to ratch it up the tensions in terms of right right, let me interrupt,

this is really important. The Secretary Commerce disagrees with you, Wilbert Ross said yesterday, I'm Bloomberg. He feels that Chinese have to respond. You're going against the secretary and saying it's what the US does well. From China's point of view, they regard the Huawei um accusations and as the action taken against Huawei this week as further ratcheting up of tensions after the after the the tariffs increased, and there was an interesting comment from Wang Yang, who's um Um

Politburo member um SO. He was giving a briefing and saying that the maximum hit that the China sees from the trade tariffs is only one percent. So if you're talking about one percent hit on six to six point five percent target UM, this means that basically they're gearing up to, you know, to take quite a quite a tough stance because they're saying it's not going to affect us that badly. We we can copeus this UM so expecting China to then um take measures to offset the

tensions when it's seeing that actually we can cope. Is you know that maybe the US is expecting too much, Miranda. Let's talk about what the Chinese can do to offset

some of the tensions. Domestically. A lot of people have taken to trying to translate Chinese media and the message in Chinese media it's a little bit more explicit today whereby a piece of commentary was carried by state run media including Shinwa News agency and the People's Daily too, and essentially it said without new moves that show the US is sincere, it is meaningless for officials to come

to China. Miranda, translate that for us. How important is that statement, that piece of cometary carried by state run media, Well, it is. It is interesting that they do feel that they can take a take a much tough restance UM. You know, because the economy and q world wasn't quite as bad as expected, um and because the tariffs don't seem to be how thing quite the catastrophic economic impact that everyone thought this time this time last year, then

then it's saying no, we can stand up. And it's particularly because if you think some of the measures that were put forward, China sees as undermining the very essence of its UM state run system UM and and also sort of been the entire Chinese system, which is it's now sort of promoting both in China and throughout the world. And so if it sees a threat to that UM

but without too bad the economic consequence. I mean, they may be a little bit too confident about how um how little an impact it's going to have, and obviously that's part of the negotiating stands UM but but but but yeah, they feel they feel, whether rightly or wrongly, they can take they can afford take a tougher stand. There was a piece carried by the Nikaation Review in the last twenty four hours that I thought was absolutely fascinating to read, and I encourage all of our listeners

to try and find it. You can get it under the headline how J J Ping's colleagues rejected an unequal trade deal? How much power does the president currently have in China right now? We typically usually and I think it's a mistake to frame this as a president of the United States that faces re election in twenty and a president in China that faces no election whatsoever and no political pressure. But at home it seems that he

is under increasingly, relatively speaking, more pressure. Miranda, how do you frame that for customers clients at the moment? Well, yes, because there's not um universal agreement that that everyone should be taking a soft stance um and and the U

S trade war is the right way to go. But the the I mean there is there is much more of a idea that China should be standing up to UM, standing up to the US, but the idea of of of threatening the relationship and also the sort of long term cooperation that that generates a lot more obviously the debate um and so you're going to have to match off, and particularly when the risk is that some of the economic um performance has actually is going to come to

an end because some of the trade was actually front loaded. So you've already seen some benefits. Now we're getting to a stage where sort of you know, the the economy is slowing, the trade impact is actually coming home to roost at the very time that the trade tensions are just like ratcheting up another stage. And this is a time where actually you could see you know, sort of the economic consequences being much more negative um and then

see much more disagreement coming through. Well, let's get real, and anybody that spending China knows real means park prices. I showed. I showed pork inflation in China a couple of days ago. Miranda Karm looking at US hog prices, lean hogs. They've been negative one standard deviation price for a good three years, and all of a sudden, even US park prices are up on trend about one standard deviation. What synthesized for us the tension of the base food

of China? For the Communist Party in Beijing, what does it mean if they see elevated pork prices and pork inflation in China, Well, that that is I mean, food inflation is a is a key issue. But I mean a lot of the pork price inflation was caused by the by the by the swine, thee yes, and and and and so it's uh, it's a consequence of that. It's not part of the part of the trade war. Although offerusly if you can't then import us pork, then

the private the domestic prices rise. Um. But but it's more I think the question is not so much on the on the food prices so much. That's not so much of a tipping point, but the um if you get there was also expectations. If you did see the trade war, economic growth was cut by one percent, and then you see unemployment rise to maybe sort of from five five to six percent, and it's it's the employment issue, which is arguably a bigger, a bigger cause of consult

but that tends that tends to shift policy. Um. And we've we you know, it's always even though everyone focuses on the GDP target, focus is always really on it. Okay, I got to get this question. We're indo, this is what your best at That labor policy? Is it different than ten years ago or thirty years ago the cultural revolution? Is the Beijing labor policy? Is it a new policy? The employment has always been I mean that that's I mean,

no one's providing a pcent employment anymore. And it's not the sort of the if you like the iron rice bull that that you would expect. But but but but everyone knows that you still have to keep them and you have fewer graduates coming in now, you know the demographics are slowing down. Um, but you do still need to keep a good, healthy employment right um. And and that's that's always um. You know there isn't the state support, but people need that employment to keep up. And it's

still it's still very valuable. Miranda Carr, thank you so much. With High Tongue International in London, briefing there in China. This is the interview of the day. If you have any kind of a pulse for American politics, why do I say that, because this is not going to be a homogenied, sanitized candidate interview. We're gonna actually talk to

somebody who speaks English. Kate Benningfield works for the former Vice President Biden of Delaware, but far more importantly has experience with Christopher Dodd, John Edwards, and Jean Shaheen, among the others along the way. Kate thrilled to have you with us as you do the operational bit for Joe Biden. I want to take you act of the Democratic campaign of two thousand four in your youth, where John Edwards got up and changed the American dialogue. Speaking of two

America's what are the Two Americas of your candidate, Joe Biden. Hi, Well, thanks for having me. I appreciate it. UM. So you know, Joe Biden is running for president for three reasons. He's been out for the last three weeks making the case to voters in all the early states and in Pennsylvania about um, uh, the need to reclaim the soul of

this nation. Uh. You know, he truly believes that I see, we are we are at a place of moral reckoning for this country, um, and that this is a moment for us to get past this, you know, broken government that isn't working for people. UM. And to your point about two America's, I mean, he's going to be talking about this in Philly tomorrow. He's got a big his first kind of kickoff rally, um, which is the informal book. John. She's promoting, you know, the moment for the vice president.

She's about to do that. That's why she's on the cut to the chase. Okay, it's it's two thousand twenty, it's October. You haven't slept since June and Joe bideness to talk to to America's secretary. Clinton had a bigger popular vote but didn't resonate with two America's, which to America's is your candidate going to try to resonate with Well, you're, first of all, you're putting the frame from the Edwards

campaign on our on our current campaigns. But but look, he uh, you know, he is somebody who comes from from middle class roots himself. Uh. You know, working people

know that. Working people know that he is somebody who understands them, who understands their concerns, who knows what it's like to you know, lay in bed at night and look at the ceiling and wonder how you're gonna be able to afford healthcare or what's going to happen if you have a health crisis in your family, how are you going to take care of it, How you're gonna

afford to send your kid to college. Uh. People know that he's somebody who has lived that experience himself, and so um, you know, Okay, So that's one of the Americas I get that is his other America Disaffected Republicans. Look, he's he's he believes that we have to come to consensus. You know something he said in New Hampshire, Uh yesterday, I believe two days ago, the days I'll run together. Um.

Uh that's what happens when you don't sleep right. Uh. That you know, without consensus in our government, power accrues to the executive and to the president and and and he can abuse it. And so you know, he believes that we're never going to be able to get anything done for people if we can't come to some kind

of consensus. Um. And you know he's had experience. Look, nobody has has had more success, you know, staring Republicans down and exacting concessions from them, uh than Vice President Biden. You go back to like the fiscal cliff deal in the White House. Um. You know, he was able to extract concessions from McConnell. So you know, nobody has uh. You know, I'd put his his his chops up against

anybody's on that. Um. But he also understands, and I think that the American people understand that right now government is not working um, and we need to change. And the kind of change he represents is getting back to um a place where uh, you know, government is functional and things get done on behalf of the American people. That's always the pitch kite to be fair every time there's an election, not just in the United States but anywhere else. We need to change. But I returned to

the status quo. It's not really a change. It's not a return to the status quo. I mean the status quo right now is is broken, right. I mean the status quo we have right now is a government where um, you know, people's concerns are not uh taken seriously, where the you know, wealth is accruing to the top of our economy, where you know, people aren't feeling the benefits of economic policies. Where we have a president who um is trying to divide us along lines of race and gender, uh,

sexual orientation. That's the status quo right now, and that is not that is general. Joe Biden represents the polar opposite of that, um and that's that to what he that's the you know, kind of leadership that he would bring to the White House. Okay, let's wrap things up with how much daylight there is between Joe Biden and the President United States on China right now? How much

daylight is that? Well, look, what Joe Biden has said, in a point he's made for for many years, is that he uh he thinks there's always a mistake to bet against American workers. UM. And he believes that this president has made some real mistakes by uh not bringing our allies along to these discussions with China, not bringing the full weight of our negotiating allies to the table, UM, and not having labor at the table. I mean that's

you know, as as president UM. You know, he believes is important to too and that in order to force China's hand, that we have to be able to bring the full negotiating weight of our allies along with us. And that's something that he would do UM as president. Okay, this is a free pass. I mean, we got through this without talking about those those pesky socialist Democrats are democratic socialists. Run out of time. There's other candidates that

we've We've got a lot to do. We'd love to have you again, Kate Benningfield, working with Joe Biden is UH on the campaign of Churs centered out of Philadelphia. The Announcementate, I believe it was yesterday, Kate, and I'll make a serious pitch. We would love to speak to the Vice president as the campaign goes forward. Clearly an

important voice across the American political landscape. Kate bending Field with thanks Joe Biden, Financial Mark Financial Markets is just rallied Sharply and Tom and we said we look at each other and we say, you know, what do we do from here? Fortunately, our next guest can be very helpful in answering that question. Bob michael Is Global c I O of JP Morgan Asset Management, Head of the JP Morgan's Global Fixing Income. Bob, thanks so much for joining us. You know, I guess the you know, the

real question is what do investors do from here? How are you approaching the markets? What a great time to be a bond. You've got central banks on hold, you've got the global economy slow, and you don't see a lot of inflation. The Fed raised rates for three years. We would have liked to have seen rates higher. But you're supposed to buy in here. You're looking at a ten year treasury that's just below two point four. You could pick up maybe a percent or so by buying

investment grade credit. You don't fight this. You go and buy bonds before they continue to drop lower and yield. So I mean, am I going where am I going? On the credit spectrum? Am I going a little bit further out on the credit quality spectrum. Well, I think this is where you have to get a bit choose here. I think for for credit um go certainly a little bit longer duration. I'd say the intermediate part of the curve five to ten year um You can go into

the high yield space. Right now. In high yield, your actually getting a yield that's about six and a half percent with a credit spread that's just over four percent, So it's compensating you for default rates that are still under one percent. So you're okay, still holding some high yield in here. But Michael, it's Friday. I'm waiting for interest rates to move higher. It's been a long wait. It's about a decade. There's a third edition of Inside

the Yield Book. Sydney Homer, Martin Leebowitz. I'm very proud that I had something to do with the reissuance of that a lifetime ago. Bob Michael. If I read Inside the Yield Book today, would it help me in this bond market? No, it would confuse you. You would miss everything that's that's old. This is why we love Hivan, Bob Michael, and folks correct, go this this is outdated thinking.

The central banks have an entire new arsenal of tools that they're deploying their sucking life out of the bond market. You can sit there and look at historic metrics and say, I know the FED should be at four and the dominure should be at five. Tom. You will get there in and you can see that they always frazzled. Michael is even fired up. He sounds almost like Jamie Diamond

right now. He's so fired up, Bob Michael. If that's the case, the bond pro seriously are going to say the vector from where we are now back to normal, it's going to be some form of jump condition. Do we have to set ourselves up for sharp price decline in fixed income assets somewhere down the road. Absolutely not. The problem is everyone is already set up for that. If you look at the flow in fixed income over the last three years, it's gone into money market funds

and short duration funds. Everyone expected they would buy bonds. At the end of this year or the start of next year. When we look at the amount of money and money market funds, it's up to three point two trillion dollars. That's the highest it's been since the financial crisis. So I mean only only money coming into the bond market right now is coming in from overseas. Domestic investors are still waiting, not going to get Okay, we've been

making jokes, folks. This is serious and this is the theme of the day off Muhammad al Arian and Ambrose Evans Pritchard that there's a dollar shortage out there abroad. There's a certain sweat and desperation which you see every day worldwide. At JP Morgan explain to our audience the desperation of foreign big money institutions that they must own full faith and credit America. We complain about short money at around two and a half percent and having to

buy the ten or at two point four percent. If you're in Switzerland, it's minus three quarters of a percent. If you're in Japan or Europe, you still have negative rates. That money is looking to find yields somewhere, and that money has been coming into the US market and has been hedged back to the base currency of whatever the

country is. That money is now starting to come in unhedged, so so money coming out of Asia and out of Europe is now coming into the bond market and bond bonds and not hedging the dollar out because they want the safe haven status of the US dollar. But we gotta leave it there. But Michael, thank you so much. That's a real clinic from JP Morgan. This is a joy because when the oil industry turns upside down, every buddy dials one. Don't they dial Daniel Jurgen, you know,

all the usual victims. And Amy Myers Jeffee, who has a shingle out at the Council on Foreign Relations. What you need to know is she's interesting when oil blows up, and Amy Myers Jeffee is really interesting when it's quiet in oil, which has been the strangeness of the last two weeks. She is the founder of the Baker Effort at Rice University on energy. She owns Rice University Energy

Oil Economics and has worked with many other institutions. Now writing at the CFR, Amy, wonderful to have you with us today. Everybody would say with the news flow brand in West Texas should be gyrating around. They're not. Why, you know, I think the traders are wrong. I mean there's this tug of war between the negative China news and all these sort of quote unquote sabotage acts, and I tell people we're using the word sabotage to make it so and small um. But it's not small um.

It's a it's a sign of escalating conflict. And the targets have been very strategic. What's the elasticity of that nexus of supply and demand right now? How tight is the market? And you know, not to get Matthew on a Friday, we don't do that. Particular weathers is gorgeous, but but what's the responsiveness we will see given an event in supply and demand? You know, the US has

this upside potential, but it's not instantaneous. So you know, if we got to a seventy dollar w t I price, you know, you have analysts like Cornerstone, Macro and City saying that you know, you could have you know, up to twice as much oil coming out of the United States production over the next two years. But you know that's over the next two years. We have to get through the summer and OPEC capacity is really constrained. It's falling. The reports out of Venezuela is that production is down

to five hundred thousand barrows a day. You know, before a month or two ago, we were saying a million. Right, you've got constraints now with Saudi Arabia because their pipeline is down. You have the contaminated oil from Russia that's clogging pipelines and inventory in Eastern Europe, so that's a constraint. Um. So you know, you have these pockets and then and then we have to worry about escalating conflict in the

Middle East. UM. Energy Intelligence Group is reporting that Saudi Arabia is beefing up security and it's offshore oil fields that border Iran's waters. So there's a lot of risk in the market, and I think the market is just to relax. What do you think the market? What do you think the market is missing here? Is that the supply issues that you just outlined, or does that have a or does the market maybe have a more doubbish view or bearish view of demand? Well, I think they

have a very devish view of demand. Um. No one is talking about a recession starting right away this summer in the United States. Gasoline demand is on track to be higher this year. Um. You know, I've heard different analysts talking about China. One has to figure that the Chinese will at least put a temporary stimulus into the market. I guess some people are judging because they haven't intervened

to stop the slide in the Chinese stock market. Um. But you know, well, demand might be a slow responder in China to the stock market decline. So I do think that the market is anticipating the lower demand and meat as being immediate and the supply outages as being temporary and um. And maybe that's not right. Maybe the supply outages might become worse or more lasting, um. And maybe the demand fall off will definitely come, but maybe

the timeline for it is farther away. So Amy, let's pick a scenario where you know, over the next several weeks or a month or so, sometime over the summer, the situations with Iran does go sideways. Where do you think w T I could go in that scenario? Well, let's what do you mean by sideways? Well, I just meant that we could have a problem with Iran and

there would be a supply disruption. Okay, My feeling is, you know, I mean, at a minimum, you know, we could have another five to ten dollars in the price just from a from the conflict worsening UM and and having there be a problem with perceptions about how much oil is available. To remember, right now, there's oil and inventory out in the Middle East and other places, and

they're using that inventory, you know, to supply people. The Europeans are drawing down inventory to replace the lost Russian barrels. You know, it's a big financial dispute over the contaminated oil. But you know, once that inventory is used, it's gone. Where's the Strategic Petroleum Reserve? Is it? Like underneath CFR up on Park Avenue? Where where is it? Actually? Where

is the thing? It's located in Louisiana and Texas. And indeed, um, I think that the administration is looking carefully at whether it needs to release the strategic prawing. Remember the Congress wanted to sell it anyway. I mean, but Amy, to be honest, you're too young to remember this, but I remember the hysteria over the Strategic Petroleum Reserve? Is that? Is that? What's next? Here? I think the the strategic pro poem reserve is on the table. Let's remember we're

also going into the US hurricane season. Let's hope there's no hurricanes that disrupt US production this year. Um, But you know it's just stuns me. Um. That the oil trading community, they're either so dependent on their algorithms on the economy, it's just hard to believe that that makes sense.

She's been waiting too too much time in the Did you see how she just went after our audience so amy, You know, one of the things I've heard about is I talked to energy people really over the last several years. It's just this extraordinary amount of oil in the US now with the shale oil. Just give us a sense of why it's not we can't just simply turn on the pickets and get that oil into the marketplace. You know we can, but there's a time lag. Companies have

their drilling schedules, and we know what those are. Those are going to produce a another eight hundred or a million barrels a day over this year. For companies to suddenly have the money and run out and put on more rigs, you know that's not going to happen in one day. I gotta get the stand there, I gotta get the rigs there. We have to have a board

meeting and decide to increase our spending. When I've got you know, my investors telling me I need to have capital discipline right, so you know it can happen, and it could be a big boost, and and that could happen in three months, six months, eight months, UM, but it's not something that's going to happen in the month of June July one refinery runs go up to supply gasoline. Amy Mayer's jeffe one final question. I don't need to

buy hold sell. I understand it's not your game. What do you think of Ana Darko, Chevron, Occidental Total, that whole dance that we saw two weeks ago. Well, you know, I like Vicky Haloub. I think she made the boldest move since the eighties when t Boon Pickens was bald and honestly, uh, if she were a man, everybody would saying, oh,

she's a risk taker. How bold Because if we have a conflict in the Middle East or justice sabotage makes the market worse, She's gonna look like a genius, having consolidated more property and being able to get those economies of scale together for the Permian. Now, I don't like Total's purchase of UM of Mozambique. I think that between you know, these long term risk to the Chinese economy and UM and the overall, we have so much natural

gas in the United States and other places. You know, I'm not so optimistic about you know, African natural gas leaving his LG is total. But you know, power to them if they think they can make a business out of that. UM and uh, you know, people. The thing that I've heard that I think is a serious challenge for Oxy is that companies always have difficulty emerging two companies when there's cultural differences. UM and the you know, sort of management style of the Anadarko and the management

style of Occidental are very different. So that's going to be a challenge. Amy, thank you so much for joining us. She's a classic Amy Myers Jeffee with the constant foreign relations of Rubenstein senior fellow there, and I really want to point out her founding abilities for James Baker at Race University where they really jump started Texas scholarship on energy. She is just wonderful. Paul, what she just said there. I mean, I don't have an opinion on this, but boy,

that zeitgeist is really out there on Oxy Forward. Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple podcasts. SoundCloud, or whichever podcast platform you prefer. I'm on Twitter at Tom Keane before the podcast. You can always catch us worldwide. I'm Bloomberg Radio